Finding Text
2025-001 Allowable Costs/Cost Principles Federal Agency: U.S. Department of Agriculture Federal Program Title: Special Supplement Food Nutrition for Women, Infants, and Children Asset Listing Number: 10.557 Compliance Requirement Affected: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: An effective internal control system over compliance with federal awards should be in place to ensure compliance with federal award requirements. Allowable costs on federal grants are expenses that are reasonable, necessary, and allocable to the project, adhering to 2 CFR Part 200 Subpart E guidelines. Condition: Audit procedures identified that a monthly reimbursement request of certain wages and related benefits contained hourly wage rate errors for two of the eleven employees. With one employee’s hourly wage rate understated and one employee’s hourly wage rate overstated. There were a total of five months that the employee’s hourly wage rate was understanded (August 2025 through December 2025) and a total of four months the employee’s hourly wage rate was overstated (September 2025 through December 2025). Questioned Costs: Less than $25,000 (Total net difference resulted in an overstatement of $6,551).Cause: Internal controls of over compliance were not sufficiently designed to ensure the correct actual wage rates and related benefits were used to request reimbursement with compliance requirements with federal awards. Possible Effect: The Health Center is not in compliance with the allowable costs/cost principles. Repeat Finding: No Recommendation: We recommend that management review and revise policies and procedures related to verifying that correct actual wage rates and related benefits are used to request reimbursements from federal awards.